Morning Report – Tuesday 7th July
Britain will pump £3 billion into environmental projects as part of its plans to protect jobs threatened by the pandemic. The investment, which will include a £1 billion program to make existing public buildings greener, will be unveiled tomorrow when Chancellor Rishi Sunak delivers an update on his strategy for reviving the economy.
Global markets took a breather, but tech shares extended gains in Asia after the Nasdaq hit another record high. SoftBank hit its highest level in two decades. U.S. and European futures slipped, while Asian markets were mixed. Chinese stocks continued to rally hard, with the CSI 300 adding 2% and the offshore yuan strengthening. Treasuries edged up and oil fell.
TikTok will remove its app from Hong Kong stores in coming days, becoming the first internet service to withdraw from the city after Beijing enacted sweeping national security laws. That comes after U.S. Secretary of State Michael Pompeo told Fox he’s “certainly looking” at a ban on Chinese social media apps including TikTok. Meantime, Google, Facebook, Microsoft and Twitter said they aren’t processing Hong Kong government requests for user data.
The pound fell against the euro but held its ground against the U.S. dollar yesterday as traders looked ahead to this month’s Brexit negotiations and more government support measures expected later this week. Traders expect more clarity by the end of July on whether Britain will agree a trade deal with the European Union.
The focus is on a virtual EU summit taking place later in the week, in which its hoped EU leaders will be able to reach some sort of agreement over the coronavirus recovery fund. Also influencing the euro this week will be the latest economic forecasts from the European Commission.
The dollar has found some traction this morning, as risks from rising coronavirus cases offset strong economic data and kept a lid on confidence in an economic recovery from the COVID-19 pandemic. Following short lived sell off yesterday, the greenback was steady on most majors.
Main Economic Data/Central Banks/Government(All Times BST)
7:00 a.m.: Germany May industrial production
7:45 a.m.: France May trade balance, current account balance
9:00 a.m.: Italy May retail sales
10:00 a.m.: Bank of Spain Chief Economist Oscar Arce Refinitiv webinar
6:00 p.m.: BOE’s Haldane speaks on webcast